A financial advisor is a person who provides financial advice and guidance to clients for compensation. They can provide various services like- investment management, tax planning, and real estate planning. They also provide other services, from portfolio management to insurance policies as a one-stop solution for their clients. Some financial advisors work independently while some are employed by a large corporate firm. The advisors are different from stockbrokers who only invest the funds of a firm in the market, they plan and help in managing the funds of the company. They gather the entire financial knowledge of the firm and help boost their economy.
A financial planner guides their clients in meeting their present financial needs and how to achieve their future goals. They not only plan the future objectives but also frame ways of achieving it. They help in reducing the expenditure of the firm and securing future investment of the company. They also keep a check on the income source of the company. They also suggest how and where to invest the money of the company. However, there are doubts that which one is the best between them both. The companies have a debate about financial advisor vs financial planner, regarding their abilities and capabilities of handling the financial situation of the company.
What is the difference between financial advisor vs financial planner?
Every company should know and check the requirements of their growth. They should also know where and upon whom to invest. Before hiring a financial advisor or a financial planner, they acknowledge their investment. However, there are some differences between both of them. Both the financial advisor and financial planner consult with their clients and review their financial status and help them to make the right decisions for income, investment, budgeting, and expenditure. These are the primary employees of a business organization or a major start-up. They are also responsible for the selling of services and products of the company.
Financial advisors provide services regarding investment options like bonds and stocks. They also offer various insurance policies to their clients. On the contrary, financial planners offer advice on investment and savings. And at certain points, the work of both these agents overlap with each other. So deciding between a financial advisor and financial planner is an important task.
What does a financial advisor do?
Some firms want to invest in a company’s stocks or want to manage their savings and expenditure they hire a financial advisor. When offering their services to a client they aim in finding out the current financial situation of the company and their objectives and goals. Advisors primarily spend a lot of time in finding out various investment options for their clients and estimate the success ratio of that company. They put the money of their clients on stocks, according to the establishment of the company in the corporate sector. They make sound suggestions to the clients by ensuring the safety of their bonds and stocks. They also keep a detailed record of their clients, to help and suggest them in an easy and fast method.
Responsibilities of a financial advisor: –
- They explain the risks associated with an investment, so the client gets the choice of selecting what to do and what not.
- They also purchase and sell stocks for their clients or the business organization.
- They assist a client or company in setting up their business portfolio.
- Advisors conduct various interactive programs and seminars to attract clients to their agency.
What does a financial planner do?
Planners analyze the finance of a company thoroughly. They calculate the net worth, income, and debt of their client or the company that hired them. They plan in securing the assets of the company. They also aim in helping their clients to reach their target or objective. After they analyze the current scenario, they plan to help secure the funds of the company in the future. Every person with some financial planning skills cannot be called as a financial planner. To become a recognized financial planner, one has to become a Certified Financial Planner under the Certified Financial Planner Board of Standards.
Responsibilities of a financial planner: –
- Planners help in assisting clients with their income and assets.
- They help to frame a plan for saving the money of the client for retirement and other purposes that can be of use in the future.
- They help the client acquire knowledge about other important assets and real estate.
- They also have a backup plan, in case of a loss in the job or the firm going on in losses.
These few differences between a financial planner and financial advisor can change the face of an organization or company. Their role in an organization also determines their worth in the company or business organization. Organizations often get confused with a financial advisor or a financial planner. Since their certification and work are different, it also affects their pay scale in a company.
Is a financial advisor get more salary than a financial planner?
Every firm has a challenge, i.e. to know whether to invest in a financial advisor or a financial planner. This can be tough, but the situation can be worse if the company is unable to estimate the price of their services. There is no clear difference between the salaries of both of them. They may get a high salary or low depending upon their work in the organization.
Advisors are paid on the terms of only fee, fee-based on the services, or commission. Fee-only advisors get money only for the products sold by them to the client. Some advisors get money based on commission. Their salary is calculated by the number of products or services sold by them through another firm or organization. Advisors getting their salary based on services offered to the clients. They also get a commission in this type of salary mode. According to various reports, the average salary of an advisor varies from 30,000 dollars to 140,000 dollars.
The annual income of a financial planner consists of fee-based planning services and commissions in the sale of products. They sell various assets like- securities of investment, annuities, life insurance, mutual funds, and exchange-traded funds (ETFs). A planner working for a company may earn less than an individual planner. However, there are various incentives to the job like- health insurance, subsidies on selected products, less interest in applying for loans, etc. These are some of the perks of becoming a financial planner for a reputable business organization. the average salary of a financial planner varies from 50,000 dollars to 300,000 dollars.
It can be clearly stated that financial advisors may have their perks and benefits but do not provide a comfortable salary as that of a financial planner. So, the company must choose wisely before investing in a financial advisor and financial planner. People should also choose these professions wisely and must see the advantages in the long run. They should not be biased with the incentives or allowances offered in the job. They should look for a good opportunity and should try to secure their job as soon as they can. The role of a financial advisor and planner matters a lot in the company. These positions help in making a lot of profit to the organization but their salaries matter a lot in their personal life.
What is the right time to hire a financial planner or financial advisor?
The business organization should know the right time to hire a financial planner or financial advisor. People can also hire these services for their personal needs. The life of an individual or organization is unpredictable. A financial loss or damage to capital can be faced at any time. In such times of crisis, the role of a financial planner and advisor becomes valuable.
The right time to hire a financial advisor: –
People can hire a financial advisor at their own will. But there are times when one needs the necessity of hiring a financial advisor. They are:
- Considering retirement:
In general, people tend to save their money during their service period for their retirement. At times, for certain unavoidable circumstances, people cannot save money and their retirement is near. At such times they should consider opting for the services of a financial advisor. A financial advisor can guide you on how to save up money within a short time for your retirement. Some people also consider taking early retirement, because of which they need to save money. A financial advisor channelizes their money in the right way, securing the retirement of its employer.
- Inheritance of a large amount of money:
Some people are unaware of the fact, that they have a lot of money left on behalf of them by their forefathers. A huge amount of money can challenge the individual to a lot of difficulties. To avoid them one must hire a financial advisor to safeguard their money and put it to better use. They help the individual to spend their money effectively and efficiently.
- Lack of coordination in assets:
Some people have various assets in their name. Such huge assets can not be managed by them on their own. This calls at the right time for hiring a financial advisor. They help to check the worth of the assets. They also put in the market in a coordinated way and bring a good profit to the owner. They also put a tab on their client’s income, and maintain records against their assets. In this way, their assets get protected and they also get an updated record against all the things.
- Changing careers or employees:
A company frequently changing its deals and products or employees need to hire a financial advisor. An advisor helps them to manage their budgets and expenditures. They also suggest adaptive means to boost its economy. They also help in finding suitable products that help in the growth of their profits. They also keep a check on how much resources the company spends on an average upon its employees. In this way, they suggest better ways to reduce the cost of labor and employees.
People working independently or offer their services to an organization can hire a financial planner according to their needs. Some of them are:
The right time to hire a financial planner: –
- Save money for retirement:
In business or service, people need to save money for their retirement. A business start-up is not going to last forever, neither the employees. So in these times, the CEO should consider hiring a financial planner. A planner helps to plan out their retirement plans and help secure it.
- Job promotion:
People with an excellent performance avail a raise within a short time. An individual can decide whether their money should be spent in living a quality life or secure it for a long run in life. A financial planner helps you to grow your money legally and safely. They know the best way to secure their employer’s money and invest it accordingly.
- A major change in the current lifestyle:
The current expenditure of a person varies from time to time. When an individual grows their family, the financial demands of the family also increases. To better plan their income and expenditures, they should hire a financial planner. A planner can help them by saving a lot of money for all the various needs of their family.
Many people have major changes in their life. But, when it comes to financial changes people become alert and worried. In these times the role of a financial advisor or planner is essential. In a business organization, the owner needs to maintain its credibility and profit. To fulfill all its requirements, it needs either a financial planner or an advisor. In such cases, it becomes difficult for a person to choose between a planner and an advisor. The fight of financial advisor vs financial planner continues to remain till this date. The need for both agents is highly required for success. However, companies and individuals can select their own choices and place their financial situation according to their needs and requirements.